Coquina Investments v. Rothstein et al

Filing 527

ORDER granting in part and denying in part 379 Sealed Motion; granting in part and denying in part 382 Sealed Motion; denying 385 Sealed Motion; granting in part and denying in part 388 Sealed Motion; denying 390 Sealed Motion; denying 392 Sealed Motion. Signed by Judge Marcia G. Cooke on 10/18/2011. (tm)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
Case No. 10-60786-Civ-COOKE/BANDSTRA
COQUINA INVESTMENTS,
Plaintiff,
vs.
SCOTT W. ROTHSTEIN and TD BANK, N.A.,
Defendants.
______________________________________________/
OMNIBUS ORDER ON MOTIONS TO EXCLUDE EXPERTS
THIS MATTER is before me on Defendant TD Bank’s Motion to Exclude Testimony of
Plaintiff’s Identified Expert Maria Yip (ECF No. 379), and Motion to Exclude Testimony of
Plaintiff’s Identified Expert Catherine Ghiglieri (ECF No. 382), and Plaintiff Coquina
Investments’ Motion to Exclude the Expert Report and Testimony of Samuel S. Rubin (ECF No.
385), Motion to Exclude the Expert Report and Testimony of Thomas M. Blake (ECF No. 388),
Motion to Exclude the Expert Report and Testimony of Ivan A. Garces (ECF No. 390), and
Motion to Exclude the Expert Report and Testimony of Craig Lessner (ECF No. 392). I have
reviewed the arguments, the record, and the relevant legal authorities. I will review each Motion
to Exclude Experts in turn.1
I. LEGAL STANDARDS
Trial courts are the gatekeepers to the admission of all expert testimony and must ensure
that any and all expert testimony or evidence admitted is not only relevant, but reliable. Daubert
v. Merrell Dow Pharms., Inc., 509 U.S. 579, 589 (1993). In order to determine the admissibility
1

The facts of this case are set forth in my January 20, 2011 Order denying Defendant’s Motion to

of expert testimony, a district court must consider whether: (1) the expert is qualified to testify
competently as to the subject matter he intends to address; (2) the method employed by the
expert is sufficiently reliable; and (3) the testimony assists the trier of fact to comprehend the
evidence through the application of the witness’s expertise. Quiet Tech. DC-8, Inc. v. HurelDubois U.K. Ltd., 326 F. 3d 1333, 1340-41 (11th Cir. 2003). “While there is inevitably some
overlap among the basic requirements-qualification, reliability, and helpfulness-they remain
distinct concepts and the courts must take care not to conflate them.” United States v. Frazier,
387 F.3d 1244, 1260 (11th Cir. 2004). “The burden of laying the proper foundation for the
admission of the expert testimony is on the party offering the expert, and admissibility must be
shown by a preponderance of the evidence.” Allison v. McGhan Med. Corp., 184 F.3d 1300,
1306 (11th Cir. 1999).
“While scientific training or education may provide possible means to qualify, experience
in a field may offer another path to expert status.” Frazier, 387 F.3d at 1260-61. Indeed, Rule
702 of the Federal Rules of Evidence makes clear that expert status may be based on
“knowledge, skill, experience, training or education.”
A qualified expert, however, must still offer reliable testimony. See Quiet Tech., 326
F.3d at 1341-42. “When evaluating the reliability of scientific expert opinion, the trial judge
must assess ‘whether the reasoning or methodology underlying the testimony is scientifically
valid and whether that reasoning or methodology properly can be applied to the facts in issue.’”
Frazier, 387 F.3d at1261-62 (quoting Daubert, 509 U.S. at 592-93). In assessing the reliability
of scientific opinion or non-scientific, experience-based testimony, a court must consider: “(1)
whether the expert's theory can be and has been tested; (2) whether the theory has been subjected
to peer review and publication; (3) the known or potential rate of error of the particular scientific
Dismiss. (ECF No. 87).

2

technique; and (4) whether the technique is generally accepted in the scientific community.” Id.
at 1262. “[I]f the witness is relying solely or primarily on experience, then the witness must
explain how that experience leads to the conclusion reached, why that experience is a sufficient
basis for the opinion, and how that experience is reliably applied to the facts. The trial court’s
gatekeeping function requires more than simply ‘taking the expert's word for it.’” Id. at 1261
(quoting Fed. R. Evid. 702 advisory committee note (2000)) (internal quotations omitted)).
A court must also determine whether the expert testimony will assist the jury. Expert
testimony is admissible under this requirement “if it concerns matters that are beyond the
understanding of the average lay person.” Id. at 1262. “Proffered expert testimony generally
will not help the trier of fact when it offers nothing more than what lawyers for the parties can
argue in closing arguments.” Id. at 1262-63.
Finally, a court may exclude expert testimony if its probative value is substantially
outweighed by the danger of unfair prejudice, confusion, or misleading the jury. Id. at 1263 see;
Fed. R. Evid. 403. Because “expert testimony may be assigned talismanic significance in the
eyes of lay jurors,” a court “must take care to weigh the value of such evidence against its
potential to mislead or confuse.” Id.
II. ANALYSIS
A.

Defendant’s Motion to Exclude Expert Testimony of Maria Yip
TD Bank moves to exclude Maria M. Yip’s expected testimony regarding the impact of

bank fraud alerts, Ponzi scheme “factors,” and her rebuttal opinions relating to conflicts of
interest and finance theory.2 TD Bank challenges Ms. Yip’s testimony based on her
qualifications, reliability, and helpfulness.
2

Ms. Yip analyzes Ponzi activity in TD Bank accounts on page 14 of her May 13, 2011 Report. Ms. Yip
analyzes TD Bank’s purported fraud alert failures on pages 15-21 of her May 13, 2011 Report. Ms. Yip

3

Ms. Yip is a certified public accountant, a certified fraud examiner, and a certified
insolvency and restructuring advisor. She is also certified in financial forensics. She is a cofounder of Yip and Levi, LLC, a forensic accounting and financial investigations firm
specializing in forensic accounting, financial investigations, bankruptcy, business valuations, and
tax controversies. She has a total of sixteen years of experience in these fields. In her
deposition, Ms. Yip testified that she has been a consultant in at least five other cases involving
Ponzi schemes. Ms. Yip explained at her deposition, that as a fraud examiner, she has “a
significant amount of experience in working on fraud examinations.” (Yip Dep. 17:17-25).
However, she admitted that she had only a “general sense” of anti-money laundering (“AML”)
or Banking Secrecy Act (“BSA”) requirements. (Id. at 18:17-19:2).
Coquina has not met its burden of showing that Ms. Yip is qualified to testify about TD
Bank’s fraud alert failures. Ms. Yip admitted in her deposition that she is neither a banking
expert nor an expert in fraud systems in banks. (Yip Dep. 18:17-19:2; 67:17-70:16). Indeed, Ms.
Yip does not appear to have any specialized knowledge, skill, experience, training, or education
in banking regulations or bank fraud alert systems. (See Yip Dep. 18:17-19:2; 59:5-63:6; 67:1770:16). Ms. Yip therefore cannot testify regarding bank regulations, including a bank’s duties
relating to fraud alerts or a purported failure in TD Bank’s fraud alert system.
Moreover, even if Ms. Yip were qualified to present her opinions on TS Bank’s fraud
alert system, her opinions are unreliable. Ms. Yip clarified in her deposition that her opinion is
that TD Bank’s fraud alert system failed in its execution because it should have “picked up more
transactions.” (Yip Dep. 69:13-70:3). However, Ms. Yip admitted she does not know what are
TD Bank’s fraud alert system criteria or parameters. (Id.) Ms. Yip further admitted that, “if
evidence was presented that demonstrated that the system picked up—the fraud alert system
analyzes Mr. Blake’s potential conflict of interest on page 8 of her June 27, 2011 Rebuttal Report.

4

picked up all of the items or transactions it was designed to pick up . . . then I would say it’s not
an execution problem or execution failure. (Yip Dep. 70:5-16). Ms. Yip’s conclusions regarding
TD Bank’s fraud alert system failures are based on speculation and unsupported by reasonable
evidence. Cf. In re BankAtlantic Bancorp, Inc. Secs Litig., No. 07-61542, 2010 WL 6352662, at
*3 n.3 (S.D. Fla. Aug. 30, 2010).
Based on her analysis of certain TD Bank accounts and her knowledge of how Ponzi
schemes function, Ms. Yip concluded that the activity in the RRA/Rothstein accounts indicated
“Ponzi activity.” Ms. Yip is qualified to provide this opinion based on her expertise as a fraud
examiner and her knowledge and experience as a consultant in other Ponzi scheme cases. TD
Bank does not challenge this opinion on its reliability or helpfulness. In any case, I find that Ms.
Yip’s analysis is sound and would help the trier of fact. Ms. Yip can testify regarding purported
Ponzi activity in the RRA/Rothstein accounts.
Ms. Yip indicates that Plaintiff’s expert, Mr. Blake, has a potential conflict of interest
because he is a former partner at Ernst & Young, TD Bank’s current auditor. Mr. Blake also
receives a pension from that firm. In making this determination, Ms. Yip applied the conflict of
interest standards that exist in the “accounting setting.” (Yip Dep. 53:16-21 (“There are
standards of independence and objectivity that accountants need to adhere to in doing their work
and when they serve as expert witnesses. So that’s—conflicts of interest are applied in an
accounting setting as well.”)). I find that this opinion will not assist the trier of fact because it
does not concern matters that are beyond the understanding of the average layperson. See
Frazier, 387 F.3d at 1262. These opinions “offer[] nothing more than what lawyers for the
parties can argue in closing arguments” or cross-examine the witness about. See Frazier, 387
F.3d at 1262-63). Ms. Yip cannot testify as to Mr. Blake’s potential conflict of interest. This

5

does not prevent Coquina, however, from attacking Mr. Blake’s credibility by cross-examining
him about any potential conflict.
TD Bank challenges Ms. Yip’s opinions in rebuttal to Mr. Blake’s first opinion. Because
I am granting Coquina’s motion to exclude Mr. Blake’s first opinion, I need not address this
opinion as no rebuttal will be necessary. See Pandora Jewelers 1995, Inc. v. Pandora Jewelry,
LLC, No. 09-61490, 2011 WL 2295269, at *5 n.5 (S.D. Fla. Jun. 8, 2011).
TD Bank also challenges Ms. Yip’s opinions in rebuttal to Mr. Blake’s second opinion.
Ms. Yip rebuts Mr. Blake’s second opinion by stating that he did not adequately consider certain
facts and evidence. “A rebuttal expert can testify as to the flaws that she believe[s] are inherent
in another expert’s report that implicitly assumes or ignores certain facts.” Pandora Jewelers
1995, Inc., 2011 WL 2295269, at *5 (quoting KW Plastics v. U .S. Can Co., 199 F.R.D. 687, 692
(M.D. Ala. 2000)). “Thus, a rebuttal expert may testify that, while the expert’s report implicitly
assumes (or erroneously fails to consider) facts X, Y, and Z, the expert's analysis is seriously
flawed if the jury does not accept X, Y, and Z as true. This is a well-accepted way to criticize
damages estimates.” Id. (quoting KW Plastics v. U .S. Can Co., 199 F.R.D. 687, 692 (M.D. Ala.
2000) (internal quotations omitted)). I find that Ms. Yip’s rebuttal to Mr. Blake’s second opinion
is reliable and helpful to the trier of fact.
Finally, TD Bank challenges certain of Ms. Yip’s statements on the grounds that they
consist of legal conclusions or are purely argumentative. I find that Ms. Yip’s opinions that
(i) Mr. Blake lacks objectivity, (ii) it appears from his deposition that he did not engage in much
supervision with his team, and (iii) Mr. Blake’s opinions have been rejected previously in other
cases by other judges, will not assist the trier of fact because they do not concern matters that are
beyond the understanding of the average layperson. See Frazier, 387 F.3d at 1262. These

6

opinions “offer[] nothing more than what lawyers for the parties can argue in closing arguments”
or cross-examine the witness about. See id. at 1262-63. Ms. Yip therefore cannot offer opinions
on these subjects.
B.

Defendant’s Motion to Exclude Expert Testimony of Catherine Ghiglieri
TD Bank moves to exclude Catherine Ghiglieri’s expected testimony regarding

BSA/AML compliance regulations and practice, as well as certain conclusions she draws with
respect to TD Bank’s actions.3 TD Bank challenges Ms. Ghiglieri’s expected testimony on the
grounds that she is not qualified, and her opinions are unreliable and unhelpful for the jury.
Ms. Ghiglieri has over twenty-five years of experience in banking. She served as the
Texas Banking Commissioner for over seven years. She then worked for the Office of the
Comptroller of the Currency in various positions for eighteen years, where she supervised
national banks and conducted fraud investigations. Since leaving government service, she has
acted as a consultant to banks in the areas of risk assessment, identification of operational
deficiencies, and regulatory compliance. She also provides training to bank directors at the Bank
Directors’ College. Based on her extensive experience in bank regulatory compliance and
practices, I find that Ms. Ghiglieri is sufficiently qualified to provide the opinions she has set
forth in her reports.
I also find that Ms. Ghiglieri’s opinions are relevant to Coquina’s claims. Whether TD
Bank ignored “red flags” indicating fraud can be admissible circumstantial evidence relevant to
whether TD Bank had knowledge of the fraud or was reckless in its actions. See United States v.
3

TD Bank also seeks to exclude Appendix H-3 to Ms. Ghiglieri’s Report because Coquina served it by email two days after it served her report on TD Bank. Coquina notes the failure to timely serve this exhibit
was an inadvertent error. TD Bank fails to show that Coquina’s mistake prejudiced TD Bank in any way.
Having determined that the omission was inadvertent and no prejudice resulted from it, I will not exclude
this portion of Ms. Ghiglieri’s report.

7

Williams, 390 F.3d 1319, 1325 (11th Cir. 2004); Smith v. First Union Nat’l Bank, No. 00-4485,
2002 WL 34355951, at *1 (S.D. Fla. Aug. 27, 2002).
TD Bank challenges several of Ms. Ghiglieri’s opinions on reliability. TD Bank notes
that Ms. Ghiglieri relied upon an outdated regulatory manual in performing her analysis of TD
Bank’s regulatory compliance. Ms. Ghiglieri’s opinion B contains extensive discussion of the
regulatory guidance set forth in the OCC’s Comptroller’s Handbook on Bank Secrecy Act/AntiMoney Laundering (2000). See Ghiglieri Rep. at 12-15. Ms. Ghiglieri’s opinion G also relies on
the OCC Handbook. See Ghiglieri Rep. at 63. The Federal Financial Institutions Examination
Council’s (“FFIEC”) 2005 BSA/AML Examination Manual superseded and replaced all other
previously issued BSA/AML handbooks. Although Ms. Ghiglieri used the FFIEC Manual in her
rebuttal report, she relied on the OCC Handbook in her initial report.
Coquina argues that the two manuals provide essentially the same guidance. Indeed, a
comparison of the relevant language in the two manuals reveals that they are substantially
similar, although the FFIEC Manual contains greater specificity and detail. Importantly, the
FFIEC Manual states that it does not set any new standards. TD Bank can only point to one
material difference between the manuals, which relates to Ms. Ghiglieri’s opinion G. Both
manuals provide substantially similar guidance and principles relating to opinion B so that it
appears that using the outdated manual did not compromise Ms. Ghiglieri’s methodology as to
that opinion. Having reviewed the guidance materials, I find that Ms. Ghiglieri’s opinion B is
reliable, but her opinion G is not.4
TD Bank points to a list of additional perceived errors or shortcomings in Ms. Ghiglieri’s
opinions regarding the assumptions she makes and the facts she relies upon. I do not find these
4

In Opinion G, Ms. Ghiglieri concludes that TD Bank “participated in the Rothstein fraud by not closing
the RRA accounts when attributes of fraud were evident.” The OCC Handbook section upon which she

8

opinions unreliable. TD Bank may attack these weaknesses through “[v]igorous crossexamination, presentation of contrary evidence, and careful instruction on the burden of proof.”
Daubert, 509 U.S. at 596.
Finally, TD Bank challenges some of Ms. Ghiglieri’s opinions on the ground that they
consist of legal opinions. An expert “cannot testify to the legal implications of conduct
[because] the court must be the jury’s only source of law.” Montgomery v. Aetna Cas. & Sur.
Co., 898 F.2d 1537 (11th Cir. 1990).
Opinion B concludes that “TD Bank aided the Rothstein fraud” when it violated banking
laws and failed to comply with industry standards. Opinion C concludes that “TD Bank
facilitated the fraud” by failing to have sufficient fraud detection systems. Opinion E concludes
that the failures in TD Bank’s systems “facilitated the fraud.” Opinions F through L conclude
that TD Bank “participated in the Rothstein fraud” for a variety of reasons.
Opinions B, C, E, F, and L provide factual conclusions based on Ms. Ghiglieri’s review
and analysis of the evidence and relevant regulatory guidance. See Georgian v. Zodiac Grp.,
Inc., No. 10-60037, 2011 WL 2530967, at *3 (S.D. Fla. Jun. 23, 2011); Kearney v. Auto-Owners
Ins. Co., No. 06-595, 2009 WL 3712343, at *5 (M.D. Fla. Nov. 5, 2009) (“While [the expert’s]
opinion overlaps the language of the statute, [he] is providing a factual conclusion-that
[defendant] acted fairly and honestly, and that it acted after giving due regard to [the plaintiff’s]
interests-not a legal conclusion.”). Ms. Ghiglieri’s opinions on these issues would assist the trier
of fact.
Opinions G through K present a different problem. These opinions consist almost
entirely of a summary of evidence such as e-mails, deposition testimony, and plea agreements,
and provide a general conclusion that the evidence indicates TD Bank participated in fraud.
relies does not appear in the FFIEC Manual, which does not recommend immediate account closure.

9

Jurors are able to read and understand witness testimony, e-mails, or other documentary evidence
without assistance of an expert. Thus, Ms. Ghiglieri’s opinions G through K are unhelpful to the
trier of fact. See In re BankAtlantic Bancorp, Inc. Secs. Litig., No. 07-61542, 2010 WL
6363027, at *6 (S.D. Fla. Sept. 9, 2010) (excluding testimony that merely “rehashe[d]
information” contained in e-mails and public filings because it would not “assist the trier of fact
to understand matters beyond the understanding of the average lay person”).
I will not allow Ms. Ghiglieri to testify as to opinions G through K because those
opinions merely rehash evidence that a jury can easily understand without the assistance of an
expert. Ms. Ghiglieri can testify as to opinions C, E, F, and L.
C.

Plaintiff’s Motion to Exclude Expert Testimony of Samuel S. Rubin
Coquina challenges Sam Rubin’s opinion that e-mails that purport to be scanned copies

of TD bank correspondence were, in fact, e-forgeries. Coquina moves to exclude Mr. Rubin’s
expected testimony on reliability, failure to produce supporting data, the opinions are
incomplete, and TD Bank’s failure to produce documents it received pursuant to a third-party
subpoena.
TD Bank served Mr. Rubin’s interim report on Coquina on June 20, 2011. TD Bank
served a supplemental report on July 1, 2011, which this Court struck as untimely. However,
this Court ruled that Mr. Rubin could testify regarding the opinions set forth in the June 20, 2011
report, and he could testify as to any documents or data attached to the July 1, 2011 report that
“directly related” to the June 20, 2011 opinions. (See ECF No. 355).
I find that Mr. Rubin’s expected testimony is reliable. Mr. Rubin is a digital forensics
expert, qualified to provide opinions as to metadata analysis. Mr. Rubin’s employed a sound
metadata analysis, which he explains in his report. That Mr. Rubin reviewed only a sample of

10

data goes to the weight of his testimony, rather than its admissibility. The fact that there may be
other e-mails in the data set, which Mr. Rubin did not review, does not alter the reliability of his
conclusion that he identified ten e-mails that were purportedly forged.
Finally, I note that TD Bank represents that it sent to Coquina the sample data set Mr.
Rubin relied upon to reach his conclusions. The e-mails are attached to his report, and TD Bank
also sent the electronic files to Coquina. Coquina therefore has the sample data set Mr. Rubin
relied upon to reach his conclusions. That TD Bank failed to provide other data, unrelated to Mr.
Rubin’s interim report, is not grounds to exclude his report.5
D.

Plaintiff’s Motion to Exclude Expert Testimony of Thomas M. Blake
Coquina moves to exclude Thomas M. Blake’s expected testimony that (i) Coquina’s

investments with Rothstein were “risky and speculative,” it was highly likely that Coquina would
lose its invested funds, and, as a result, Coquina did not suffer damages with respect to its
investment; and (ii) assuming TD Bank’s liability for any funds in RRA account 1614,
Coquina’s damages are $270,536.
Coquina argues that Mr. Blake’s first opinion is unreliable because it is unexplained and
unsupported. Coquina also argues that his first opinion will mislead the jury. Mr. Blake, relying
on modern finance theory, determined that the Rothstein settlement investment opportunity was
risky and speculative, and therefore it was highly likely that Coquina would lose its money. Mr.
Blake concludes that Coquina did not suffer any damages because “the risk of loss implied by
these returns is so high that any calculation of damages is speculative and unreliable.” Mr. Blake
then calculates Coquina’s damages at zero.
Contrary to Coquina’s arguments, Mr. Blake explains the finance theory on which he
5

Mr. Rubin may not testify as to any additional data or documents that directly relate to Mr. Rubin’s June
20, 2011 report unless TD Bank properly provided these to Coquina in a timely manner.

11

bases his analysis. Blake Rep. 4, 16-17. Mr. Blake’s analysis supports his findings regarding a
reasonable investor’s profit expectations. Finance theory—and logic—support a conclusion that
a “safe” investment generally yields lower returns, while riskier investments generally yield
higher rates of return. However, TD Bank retained Mr. Blake to provide an opinion on damages,
not on what Coquina should have reasonably expected its returns to be.
Mr. Blake does not explain why Coquina’s measure of damages should be zero, i.e., he
does not provide any support for calculating Coquina’s damages as its likely return on the
Rothstein investment. See In re BankAtlantic Bancorp, Inc. Secs. Litig., No. 07-61542, 2010 WL
6397501, at *4 (S.D. Fla. Aug. 23, 2010). Indeed, Mr. Blake’s first opinion does not reflect a
proper measure of damages under RICO or common law fraud in Florida. “The measure of civil
RICO damages (before trebling) is the harm flowing from the predicate acts, meaning any direct
financial injury suffered by the plaintiffs as a result of those acts.” Allstate Ins. Co. v.
Palterovich, 653 F. Supp. 2d 1306, 1326 (S.D. Fla. 2009) (quoting City of Chicago Heights, Ill.
V. Lobue, 914 F. Supp. 279, 282 (N.D. Ill. 1996) (internal quotations omitted)). “[U]nder
Florida law, the first measure of damages for a successful fraud claim is known as the ‘out-ofpocket rule,’ which allows for recovery of amounts that the plaintiff actually lost.” Id. (quoting
Laney v. Am. Equity Inv. Life Ins. Co., 243 F.Supp.2d 1347, 1354 (M.D. Fla. 2003) (internal
quotations omitted)). Because Mr. Blake’s first opinion contains unsupported conclusion and
does not comport with a recognized measure of damages, I find that it is not reliable.
Coquina challenges Mr. Blake’s second opinion because it is conclusory, unclear, and
unhelpful for the jury. Mr. Blake states that, based on his review of bank statements for RRA
Account 1614 (the account identified in TD Bank’s “lock letter” to Coquina), all of the funds
deposited in this account were paid to Coquina except for one transfer in the amount of

12

$240,000.00. He adds to this amount $30,536.00 in interest. Assuming that TD Bank may pay
to Coquina all of the funds contained in RRA Account 1614, Mr. Blake concludes that Coquina’s
damages are $270,536.00.
An expert’s opinion on damages “must be predicated on assumptions which have a
reasonable basis in the evidence.” Eastern Air Lines, Inc. v. McDonnell Douglas Corp., 532
F.2d 957, 999 (5th Cir. 1976). To reach his conclusions, Mr. Blake assumed the lock letters
correctly indicated the account that held Coquina funds. The lock letters stated that all funds
contained in the account would be distributed only to Coquina. However, Maria Yip, Coquina’s
expert, identified a transfer in the amount of $240,000.00 from Account 1614 to another
Rothstein account. Mr. Blake’s assumptions have a reasonable basis in the evidence.
Coquina argues that Mr. Blake takes an “unreasonably narrow view of the fraud.” “As a
general rule, the factual basis of an expert opinion goes to the credibility of the testimony, not the
admissibility, and it is up to the opposing party to examine the factual basis for the opinion in
cross-examination.” Synergetics, Inc. v. Hurst, 477 F.3d 949, 955-56 (8th Cir. 2007). Coquina
may attack any perceived witnesses in Mr. Blake’s assumption through “[v]igorous crossexamination, presentation of contrary evidence, and careful instruction on the burden of proof
vigorous cross-examination.” Daubert, 509 U.S. at 596; see also Quiet Tech., 326 F.3d at 1345
(arguments regarding deficiencies in making calculations, i.e., using wrong numbers, should be
addressed through cross-examination because they “impugn the accuracy of [the] results, not the
general scientific validity of [the] methods”). I find that Mr. Blake’s second opinion is reliable
and helpful to the trier of fact. Mr. Blake may testify as to his second opinion.
Finally, Coquina moves to exclude as irrelevant Mr. Blake’s summary of evidence and
his opinion on the “general economic trends” at the time of Coquina’s first investment. TD Bank

13

retained Mr. Blake as a damages expert. Mr. Blake provides a summary of the evidence as
background information that he relied upon to reach his opinion on damages. To the extent he
relied upon this information to form his opinion, it is relevant to that opinion. Mr. Blake,
however, may not provide opinions as to the history of this litigation or provide a summary of
the evidence to the jury independent and unrelated to his second opinion on damages. Further,
Mr. Blake’s opinion on “general economic trends” is irrelevant to damages. Thus, he may not
testify as to this topic.
E.

Plaintiff’s Motion to Exclude Expert Testimony of Ivan A. Garces
Coquina moves to exclude Ivan A. Garces’ expected testimony regarding BSA/AML

compliance regulations and practice. Coquina challenges Ms. Garces’ expected testimony on the
grounds that his opinions are unreliable, irrelevant, and unhelpful for the jury.
Coquina essentially argues that Mr. Garces ignores certain facts and fails to use or
identify a reliable methodology for his analysis. “[A] trial court may exclude expert testimony
that is imprecise and unspecific, or whose factual basis is not adequately explained.” Cook ex rel.
Estate of Tessier v. Sheriff of Monroe Cnty., Fla., 402 F.3d 1092, 1111 (11th Cir. 2005) (internal
quotations omitted)). However, “the weaknesses in the underpinnings of the expert’s opinion go
to its weight rather than its admissibility.” Jones v. Otis Elevator Co., 861 F.2d 655, 663 (11th
Cir. 1988).
Mr. Garces has fifteen years of experience conducting BSA/AML compliance reviews
and investigations for financial institutions. He is also a certified anti-money laundering
specialist and a certified fraud examiner. For each of his opinions, Mr. Garces explains the facts
and evidence he relied upon, and the statutes and regulatory framework he applied. Mr. Garces
also relies upon the regulatory guidance set forth in the FFIEC Manual. I find that Mr. Garces

14

has adequately supported his conclusions and his assumptions have a reasonable basis in the
evidence. Coquina may attack any perceived weaknesses in the underpinnings of Mr. Garces’
opinions through cross-examination or through another expert’s conflicting opinion. See, e.g.,
Daubert, 509 U.S. at 596; Jones, 861 F.2d at 663 (“On cross-examination, the opposing counsel
is given the opportunity to ferret out the opinion’s weaknesses to ensure the jury properly
evaluates the testimony’s weight and credibility.”).
F.

Plaintiff’s Motion to Exclude Expert Testimony of Craig Lessner
Coquina moves to exclude Craig Lessner’s expected testimony that (i) Coquina

conducted inadequate due diligence to determine whether Rothstein’s purported settlements were
genuine; (ii) several aspects of the transaction structure and documentation were red flags that
the settlements were fraudulent; (iii) the high discount rate applied to each settlement indicates
the significant risk associated with the settlements; and (iv) the confluence of so many settlement
sellers needing to sell settlements at deep discounts is not believable. Coquina challenges Mr.
Lessner’s opinions on reliability, helpfulness, and relevance.
The basis for Mr. Lessner’s expertise is his experience in the field of settlement funding
transactions. The parties do not dispute that Mr. Lessner is qualified to provide the opinions set
forth in his report. Since 1998, Mr. Lessner has been the Senior Vice President and General
Counsel of Peachtree Settlement Funding (“Peachtree”). In this position, Mr. Lessner has
transaction-level involvement in Peachtree’s settlement funding transactions. He reviews and
approves high-dollar transactions at the company. He is also responsible for the overview of the
legal aspects of Peachtree’s capital markets activities. He has knowledge of the discount rates
for settlement purchasers through information circulated in the marketplace and made public
through court filings. Mr. Lessner is also a member of the National Association of Settlement

15

Purchasers Legal Committee.
The parties’ arguments focus mostly on Mr. Lessner’s first opinion. Mr. Lessner opines
that Coquina did not properly or adequately design or execute its due diligence. Mr. Lessner
admitted in his deposition that there is no due diligence industry standard. According to Mr.
Lessner, Peachtree developed for its private use the due diligence items that he lists in his report.
Mr. Lessner stated in his deposition that this list was “something you get from experience.”
Coquina focuses on the listed Daubert factors, and argues that Mr. Lessner’s opinion regarding
due diligence is unreliable because it cannot be tested, has not been subject to peer review or
publication, its success rate is unquantified, and it is unknown whether this methodology is
accepted in the field.
This Court, however, is not limited to reviewing only Daubert factors. “Sometimes the
specific Daubert factors will aid in determining reliability; sometimes other questions may be
more useful. As a result, the trial judge must have considerable leeway in deciding in a
particular case how to go about determining whether particular expert testimony is reliable.”
Frazier, 387 F.3d at 1262. When a witness “is relying solely or primarily on experience, then
the witness must explain how that experience leads to the conclusion reached, why that
experience is a sufficient basis for the opinion, and how that experience is reliably applied to the
facts.” Id. at 1261.
Mr. Lessner explains in his report and in his deposition that he created the listed items in
his first opinion based on his experience in the field. For each item, he explains why that item is
relevant or important. Mr. Lessner also explains why his experience is a sufficient basis for his
opinion. First, there are no due diligence industry standards, so experience in the field appears to
be the only way to devise an adequate due diligence plan. Second, Mr. Lessner explains that

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Peachtree regularly considers the items he lists in his report when conducting due diligence. He
notes, “we have developed our own due diligence items, in the company, [that] we follow and
feel are important relating to the particular asset that we’re purchasing.” (Lessner Dep. 72:3-6).
Mr. Lessner explains why each item is relevant and important to due diligence. Applying this
list of due diligence items to the due diligence Coquina undertook, Mr. Lessner concludes that
Coquina did not properly design or execute its diligence. I find that Mr. Lessner has adequately
demonstrated how his experience led him to his conclusions, why his experience is sufficient,
and how that experience is reliably applied to the facts. Accordingly, Mr. Lessner’s first opinion
is reliable. Coquina may attack any weaknesses in Mr. Lessner’s testimony through crossexamination.
Coquina’s arguments focus only on Mr. Lessner’s first opinion. Coquina does not
independently challenge the reliability of his second, third, and fourth opinions. Coquina
appears to argue that Mr. Lessner’s second, third and fourth opinions flow from the first opinion.
I agree that the second, third, and fourth opinions are related to the first opinion. I find that Mr.
Lessner has adequately explained how his experience led him to his conclusions, why his
experience is sufficient, and how that experience is reliably applied to the facts. I therefore find
that Mr. Lessner’s additional opinions are reliable.
I also find that Mr. Lessner’s opinions regarding due diligence would be helpful to the
jury. Whether Coquina adequately performed its due diligence and failed to identify or
recognize certain “red flags” are matters beyond the understanding of the average lay person.
See Frazier, 387 F.3d at 1262.
Finally, I find that Mr. Lessner’s opinions are relevant, at minimum, to Coquina’s
fraudulent misrepresentation claim. Under Florida law, if the recipient of a misrepresentation

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“‘knows that it [the statement] is false or its falsity is obvious to him,’ his reliance is improper,
and there can be no cause of action for fraudulent misrepresentation.” M/I Schottenstein Homes,
Inc. v. Azam, 813 So. 2d 91, 94-95 (Fla. 2002) (quoting Bessett v. Basnett, 389 So. 2d 995, 997
(Fla. 1980)). Mr. Lessner’s testimony is relevant to demonstrate that the falsity of TD Bank’s
employees’ misrepresentations was obvious. Mr. Lessner may testify at trial as to the four
opinions set forth in his report.
III. CONCLUSION
Accordingly, it is ORDERED and ADJUDGED that:
1. Defendant TD Bank’s Motion to Exclude Testimony of Plaintiff’s Identified Expert
Maria Yip (ECF No. 379) is GRANTED in part and DENIED in part. Ms. Yip
may not testify at trial as to (i) TD Bank’s fraud alert failures; (ii) Mr. Blake’s
potential conflict of interest, (iii) Mr. Blake lack of objectivity, (iv) Mr. Black’s lack
of supervision of his team, and (v) Mr. Blake’s opinions rejected previously in other
cases by other judges.
2. Defendant TD Bank’s Motion to Exclude Testimony of Plaintiff’s Identified Expert
Catherine Ghiglieri (ECF No. 382) is GRANTED in part and DENIED in part.
Ms. Ghiglieri may not testify at trial as to opinions G through K in her report.
3.

Plaintiff Coquina Investments’ Motion to Exclude the Expert Report and Testimony
of Samuel S. Rubin (ECF No. 385) is DENIED.

4. Plaintiff Coquina Investments’ Motion to Exclude the Expert Report and Testimony
of Thomas M. Blake (ECF No. 388) is GRANTED in part and DENIED in part.
Mr. Blake may not testify as to opinion 1 in his report or as to “general economic
trends” at the time of Coquina’s first investment.

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5. Plaintiff Coquina Investments’ Motion to Exclude the Expert Report and Testimony
of Ivan A. Garces (ECF No. 390) is DENIED.
6.

Plaintiff Coquina Investments’ Motion to Exclude the Expert Report and Testimony
of Craig Lessner (ECF No. 392) is DENIED.

DONE and ORDERED in chambers, at Miami, Florida, this 18th day of October 2011.

Copies furnished to:
Ted E. Bandstra, U.S. Magistrate Judge
Counsel of record

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